Enron Europe's debts in 'billions'

AROUND 1,000 power and gas trading companies and financial institutions across Europe are owed 'billions of dollars' by Enron according to administrators of the London-based end of the failed US energy firm.

The view of accountants PricewaterhouseCoopers unravelling the remains of Enron Europe is a substantial increase on earlier estimates.

Enron Europe administrator Neville Kahn said today: 'We are currently looking at around 250,000 individual trades. While it is too early to say what the level of liabilities will be, we are looking at it running to billions of dollars.'

Last month, PwC administrators were cautiously reckoning that power traders who dealt with Enron Europe, and financial institutions which lent it money, were owed 'above $1bn(£706m).'

Enron Europe, which employed 1,400 people at its Grosvenor Place base near Buckingham Palace, acted as a middleman, buying and selling electricity and gas contracts in Britain and Western Europe. The company, a virtual trader which never physically took delivery of commodities, also dealt in metals, coal, pulp paper and petrochemicals.

Documents from the administratorsto creditors seen by the London Evening Standard's Business Day section reveal the extent to which Enron Europe was losing money.

Latest audited accounts for Enron Europe, which also take in the group's power generating operations on Teesside, show a thumping loss of £390m in the year to 30 June. Accounts for 2001, showing the disarray at the company before its was put into administration in November, may be available at a creditors' meeting in London called by the administrators for Friday week.

Kahn said the amount of money the administrators are likely to get back could be between $500m and $750m. That will come from the realisation of assets such as the Teesside plant and $100m of open trading positions which remain profitable.

Administrators are also hoping to get returns from an internet auction later this month of fixtures and fittings from its London base, said to be worth £21m. These include thousands of computers and trading screens as well as equipment from the staff health club.

More than 1,100 staff were laid off with minimal redundancy payments in November and a further 200 have since gone. Just who is owed what may become clear in coming months as energy groups and banks report profit and loss accounts.